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By Likha C Cuevas-Miel, Reporter
AYALA Corp. on Friday said it expects growth to
slow down this year due to the uncertainties brought about by the US
economic weakness and higher inflation.
In a briefing, Jaime Augusto Zobel de Ayala, the
conglomerate’s chairman and chief executive officer, said that it
may be unable to replicate last year’s record expansion due to the
sudden shift in sentiment worldwide.
“We’re entering a cycle as you know from the
beginning of the year when the asset values have come down. It will
be hard to realize the same value creation numbers that we were able
to achieve last year so chances are while the companies continue to
grow, the returns for Ayala Corp. will be lower this year. By how
much it’s hard to predict. It’s a natural consequence of having
the markets in general come down,” Zobel de Ayala said.
Last year, the holding firm’s profit rose by
33 percent to a record P16.2 billion, driven by the strong
performance of its major operating units. The group’s earnings had
grown by a compounded annual growth rate of 37 percent over the past
six years with return on equity reaching its highest at 19.7 percent
last year.
Despite the slowdown, the Ayala group is
stepping up its investments “to continue to pursue potential areas
for growth in tandem with the holding company’s efforts to seek
new investment opportunities,” the conglomerate said.
For this year, it has earmarked P56 billion in
capital expenditures spread across its business units. This is 43
percent higher than last year and almost half of this at P24.3
billion would be spent on real estate projects.
The group’s telecommunications arm, Globe
Telecommunications Inc., has earmarked $400 million to $450 million
in capital spending, P7.5 billion of it raised from borrowings this
year.
Manila Water Co. would also be getting a big
share of the pie at P7.7 billion. Bank of the Philippine Islands
earlier said it is keeping its coffers full to seize any opportunity
to acquire another bank.
The group’s business process outsourcing (BPO)
initiative under LiveIt Solutions Inc., is expected to do well given
the US slowdown, which would bring more off-shored and outsourced
jobs to the country.
“[We expect] very strong, healthy top line
growth especially for our younger companies, especially for
Integreon because of greater scale we are able to fill up the
capacity. We invested in new facilities in Mumbai, Delhi, Manila.
When you’re filling up your capacities you have better margins,”
Alfredo Ayala, LiveIt chief executive, told The Manila Times.
The global BPO arm of the Ayala group plans to
acquire another US-based firm possibly this year through its
88-percent owned unit, Integreon. “It’s not that we’re the
only ones looking at [acquisitions] right now. A lot people are
asking how low can it further go? You don’t want to catch a
falling knife and you catch it and it is (still falling). It is in
the timing,” the LiveIt executive said.
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